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Fiscal Sponsorship and Group Exemption

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Fiscal Sponsorship and Group Exemption

Referenced Page: 
Fiscal Sponsorship

There are many complexities inherent in obtaining non-profit and tax-exempt status for our spaces. The School Factory, a 501c3 organization, is currently providing tax exempt status to a number of spaces through fiscal sponsorship, a legal means of providing this status to projects and programs. We are also working on group exemption, which is a more elaborate and complex alternative to fiscal sponsorship but which offers spaces greater freedom and control over their tax exemption and donations.

This blog post serves as the Space Federation's primary place of discussion and talk regarding tax exemption, non-profit status, and group exemption. 

Please also reference the Fiscal Sponsorship reference pages in the Notebook.

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#1

Here's what I found online: http://www.irs.gov/pub/irs-tege/eotopica87.pdf

I will go through this site and create a notebook page of sequential list of tasks that need to be completed to obtain group exemption status, per the task assigned to me.

#2

For Group Exemption, one specific question to look into:

Can Space Federation members join & leave group exemption in a fluid manner?

For example, if the School Factory acquires group expemption status with 20 members included, can new member spaces join after the fact? Can they join on an annual basis? What happens if a member space wants/needs to leave the Space Federation and/or the group exemption?

 

For fiscal sponsorship as a whole, I am also researching another question: What if a Space Federation member wants to sell an item that was donated?

#3

Based on recent emails between the School Factory and several Federation spaces, I submitted a request to M-LINC, a pro-bon nlawyer matching program for nonprofits offered by Marquette University:

Describe the specific kinds of legal assistance the nonprofit now needs or anticipates needing in the future

We have several questions related to Fiscal Sponsorship and Group Exemption.

Fiscal Sponsorship: The School Factory supports a variety of collaborative work spaces throughout the country where the public can come to work, play & learn, create & collaborate on all levels. A local example is Bucketworks (bucketworks.org). All of these collaborative spaces utilize the 501(c)3 status of The School Factory as their fiscal sponsor, and we need some clarity around what this does and does not mean to the organizations. If the School Factory is the fiscal sponsor, does that mean that they have to complete financial reporting, taxes, etc. for all of the collaborative spaces across the country? Or do those responsibilities lie with the individual spaces themselves?

Group Exemption: The School Factory is currently exploring the option of Group Exemption for all the collaborative spaces across the country. While it would make the process of accepting donations easier for each collaborative space, does this mean that they all would need to agree & comply with operational policies established by the fiscal sponsor (The School Factory)? How should the School Factory "police" compliance and what risks exist for the School Factory if any collaborative space doesn't comply? What should be included in any Articles of Operation that would be created and what is the best way to get them created?

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